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Morning Commentary: Costamare to price, existing preferreds slip; Legacy Reserves down
By Abigail W. Adams
Portland, Me., Jan. 25 – Costamare Inc. announced plans to price an offering of $25-par perpetual series E cumulative redeemable preferred stock. The offering is the first sale of new paper this week, which so far has seen only one add-on price.
Morgan Stanley & Co. LLC, UBS Securities LLC, Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Stifel, Nicolaus & Co., Inc. and Credit Suisse Securities (USA) LLC are joint bookrunners for the deal, which carries a greenshoe.
The Monaco-based owner of containerships for charter in the international shipping industry is a repeat issuer of preferred stock.
Costamare’s 7.625% series B cumulative redeemable perpetual preferred stock slipped 14 cents, or 0.58%, to $24.30 in early trading.
The company’s 8.5% series C cumulative redeemable perpetual preferred stock slipped 0.3615 cents, or 1.4297%, to $24.9233.
The company’s 8.75% series D cumulative redeemable preferred stock slipped 0.5895 cents, or 2.2774%, to $25.2955.
Legacy Reserves LP’s 8% series A and series B fixed-to-floating rate cumulative redeemable preferred units were down in early trading.
The 8% series A units were down about 15 cents, or 2.27%, to $6.401 in early trading.
The 8% series B units were down 9 cents, or 1.39%, to $6.40 early in Thursday’s session.
Moody’s Investors Service lowered Legacy’s speculative grade liquidity rating to SGL-4 from SGL-3 and changed the outlook to negative from stable on Wednesday.
The rating agency said that its action followed Legacy’s purchase of $187 million of 6 5/8% senior notes due 2021 at a discount of about 30% of par.
While the buyback reduced total debt, interest expense increased because it was funded with second-lien debt that carries a higher interest rate, Moody’s said.
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